Business Daily (Nairobi)
Francis Okomo-Okello
6 May 2008
document
Abridged version of a speech delivered at the brand launch of the Strathmore Business School (SBS), Strathmore University, Nairobi.
What role should business management and leadership play in helping Africa to meet the development challenges it faces today?
My article is premised on the hypothesis that quality business management and leadership is absolutely essential for Africa's economic development and growth, and that the low levels and lack of sustainable wealth creation in Africa is directly attributable to failure in management and leadership.
I will review Africa's leadership quotient, identify some specific management and leadership gaps, and suggest possible remedial measures that can be taken. Exposing failure in business management and leadership as the underlying reason for Africa's poor development performance track record.
Let me begin by wrestling with a paradox: Why should Africa be experiencing such low rates of wealth creation and yet the continent is so resource rich? Why should Africa fall short of achieving the UN Millennium Development Goals? As a prelude to answering these basic questions, let us remind ourselves about Africa's well documented resource base.
In his book Africa in Chaos, Prof. George B.N. Ayittey notes that Africa is a continent with immense untapped mineral wealth (base and precious minerals). He notes that Africa has "40 per cent of the world's potential hydroelectric power; the bulk of the world's diamonds and chromium; 30 per cent of uranium in the free world; 50 per cent of the world's gold; 90 per cent of its cobalt among others.
Africa also accounts for 70 per cent of cocoa, 60 per cent of coffee, 50 per cent of palm oil, and 20 per cent of the total petroleum traded in the world market, excluding USA and Russia.
The tourism potential is enormous, unrivalled wildlife, scenic grandeur, and pristine ecology constitutes Africa's third greatest natural resource after agriculture and mineral wealth.
Prof Ayittey notes that in sharp contrast, according to the 2006 UN Human Development Report, as interpreted in the Merrill Lynch Thematic Investing Report: Africa, the final frontier of the 31 countries ranked by the UN HDI as "low" in terms of human development, 28 are in Africa with only 12 being ranked as "medium" and only one (Mauritius) having reached the lofty status of " high".
In terms of per capita gross domestic product (GDP) measures, almost two -thirds of African countries remain below the $2,000 level per capita GDP notwithstanding the windfalls associated with the commodity price boom witnessed during the last several years.
On the health front, according to the UN report, about 40 million people across the globe were living with HIV in 2006, up 2.6 million or seven per cent from 2004. As for infant mortality rates across the world when viewed in terms of proportion of newborns dying before age one (per 1,000), according to the UN World Population Prospects (the 2006 revision), Africa has the dubious distinction of scoring 90 against 46 for Asia, eight for Europe, 23 for Latin America and six for North America and 27 for Oceania. Why such a depressing picture and scenario?
To get an honest answer, let us travel to Nigeria and have a brief chat with that great African novelist Chinua Achebe, who in his book The Trouble With Nigeria observes that: "The trouble with Nigeria (read Africa) is simply and squarely a failure of leadership".
There is nothing basically wrong with the Nigerian character. There is nothing wrong with the Nigerian land or climate or water or air or anything else. The Nigerian problem is the unwillingness or inability of its leaders to rise to the responsibility, to the challenge of personal example which are the hallmarks of true leadership...We have lost the 20th century; are we bent on seeing that our children also lose the 21st century.
We are all aware of the many explanations or rather excuses we often hear that seek to explain Africa's low score in the economic development and growth agenda. These vary from blaming everything on colonialism, imperialism or neocolonialism, civil wars, poor weather, lack of resources to a lop sided international trading regime.
We are also aware that there are raging arguments all over Africa and around the world between the so called 'internalists' and 'externalists' whose major preoccupation is to diagnose whether Africa's unsatisfactory performance is caused by internal or external/exogenous factors.
However, as we continue to argue amongst ourselves and as we listen to others argue, former colonies such as Mauritius, Korea, India, Hong Kong, Singapore and Thailand , some of which are our age mates in terms of colonial and independence history, have their economies firing from all pistons. While we are blaming civil wars for Africa's unsatisfactory state of economic development and growth, Vietnam, after unprecedented civil strife, is finding its feet and charging forward and while we are blaming nature for bad weather, the United Arab Emirates is showing that nature can be tamed.
As Achebe correctly observes, the problem with Africa's state of low capacity to create wealth is poor management and leadership. This is why the debate around the theme: "Business Management & Leadership; Taking Africa Forward" should seriously concern all of us.
"Business Management and Leadership" should be understood in their ordinary meaning as the need to develop business management and leadership skills that are required to efficiently and competitively run Africa's Public and Private sectors so as to optimise wealth creation in the increasingly competitive globalised economy for the benefit of the Continent and its citizenry.
This article ignores the technical distinction usually drawn between "management" and "leadership" and proceeds on the basis that "leadership" is the foundation while "management" is an off shoot of leadership. Management or the art of managing is about execution, administration, directing etc. while leadership is mainly driven by strategic vision of the direction which the businesses which are being managed should take.
We therefore focus on the foundational and proceed on the basis that although there is no agreed definition of the term "leadership", there is a sense in which it can be reasonably argued that a leader is a person who has the capacity and capability to mobilise or galvanise people to realize a common goal aimed at achieving public or common good by producing socially useful outcomes but all the while observing the core values which society holds dear.
Let's turn to the familiar debate: "leaders are born and not made." Here we make the argument that as is the case with any other form of skills, management and leadership, skills can be both cognitive and acquisitive. Leadership can be acquired through learning and adaptation.
As Nelson Mandela has aptly observed: "Education is the most powerful weapon which you can use to change the world". Indeed, Ronald Heifetz, the Harvard scholar makes the same observation when he criticises the common personalistic orientation to the term leadership as being based on the misleading assumption that leaders are born and not made.
As a good friend and colleague, Ali- Mufuruki, the current Chairman of the Africa Leadership Initiative (ALI)-East Africa Foundation correctly observes: "Many people never exercise leadership, even though they have the personal qualities we might commonly associate with it." By unbundling leadership from personality traits, we permit observations of many different ways in which people exercise leadership every day without necessarily being "leaders". Different leaders in history saw leadership differently.
For example, Winston Churchill, the premier statesman who led Britain victoriously through the World War II, sees leadership as "taking responsibility, facing adversity, dealing with failure, making tough choices with courage, keeping an open mind and effective communication" among others.
Mandela, the paragon of virtue, sees leadership as modesty, tolerance, courage, selfless service to others and determination, among other qualities; qualities that have elevated him to a state of reverence and of being a world icon.
I believe that for Africa to move forward in its economic development and growth agenda, the continent will have to be firmly anchored on the proverbial three legged African stool comprising public (Government)/private sector partnership (PPP) and the citizenry; a partnership that flourishes best in situations where societies are driven by proper governance structures, democratic ideals and a pronounced sense justice and equity.
The basic role of the public sector should be the provision of an enabling environment in which the private sector can then be the prime mover for economic development and growth.
Thus, as controversial as it may be, PPP as a development model is taken to be a critical plank in Africa's economic development and growth process. Therefore, when we talk about leadership as broadly defined, we are able to observe that Africa is going through a serious leadership crisis which in practical terms is translating into delayed and/or unsatisfactory responses to the continent's development challenges.
By way of illustration, see what is currently happening in Zimbabwe and the other well known cases such as the Democratic Republic of Congo, Sierra Leone, Ethiopia-Eritrea, Liberia, the Sudan and Somalia. To the extent that these are examples of countries that have been generally characterised as "failed states".
Although Kenya might not have spiralled to the lower thresholds in the post December 2007 political impasse, thanks to the gallant efforts made by the Dr. Kofi Annan-led mediation team, the unfortunate development is as disruptive of Kenya's development and growth agenda as it is unwelcome.
I do not accept the argument that what Kenya went through is a normal evolutionary process to democratic maturation. I do not therefore believe that we have to necessarily go through such painful and disruptive experiences in order to learn and grow. I believe that as a people, we failed ourselves as we, particularly the leadership, should have done better and we must all be ready to take responsibility for the systemic leadership failure that almost brought our country to the brink of a precipice.
So, can Africa seriously leave its fate to political leaders who are just a section of the leadership, albeit, major players in influencing and determining the outcome of events that impact on our lives?
Is it not time that leadership as a tool and a catalyst for development is redefined and understood to be more encompassing? Is it not time that corporate or business leaders as well as civic leaders found their liberating voices and started to prepare and project themselves as competent dialogue partners in public policy dialogue and formulation?
Is it not time for political leaders in Africa to start deepening and broadening their understanding of business and management? Is it not time that we should earnestly start the process of cross pollination between the actors in the public and private sectors through the PPP development model?
In the Kenyan example, is it not time that the PPP model is anchored on a stronger professional foundation?
The key message coming out of the exploration as noted above is that as a strategic imperative for Africa's development and growth, leadership as broadly defined should be our priority business as a collective.
Having accepted the proposition that there is a leadership crisis in Africa, the next basic question which we should be asking ourselves is: What is the root cause of this crisis and how can Africa remedy and reverse the crisis?
To my mind and as Strathmore Business School (SBS) acknowledges, the globalised economy of which Africa is an integral part is going through "bewildering rate of change" and the resultant "emerging new ethical and governance challenges call us to make time and reflect on the new realities (read development challenges)" which are also forcing the conventional "business paradigms and benchmarks" to be continuously reviewed.
How is Africa preparing itself to face these challenges and which are these new challenges? In other words, what are the gaps/deficits in Africa's leadership quotient that we should be addressing?
As noted above, given the competitive globalised economy in which Africa is trying to find a slot, there are several challenges associated with business management and leadership generally which managers and leaders in Africa must confront and conquer. I see the following as some of the critical challenges: First, globalisation in a knowledge-based business environment, adaptation to change and innovation in a word research and development.
The other challenge is the weak governance structures both economic, political and corporate. The other challenges are absence of values, limited understanding of issues related to the environment and sustainable development in the era of diminishing natural resources and finally, the appreciation of the role of ICT in development.
First, the rapid pace at which world economies and markets are getting globalised and integrated is causing serious leadership challenges. As part of facing the globalisation challenge, Africa must be efficient in its production processes which have to be quality-driven. Africa must have a proper understanding of the dynamics that drive the international markets.
Do we as leaders fully understand the globalisation phenomenon and how it impacts our businesses and way of life? Do we have the capacity to influence and/or mitigate its impact?
Do we see the emergence of regional trading blocks such as SADC/PTA, Comesa, EAC and Ecowas as a means of creating larger markets and positioning ourselves in the global trading system where for instance WTO, Nafta, EU, OECD, Asean and MERCOSUR (Southern American Common Market) hold sway and most times act to Africa's detriment? Are we playing any active and meaningful role in promoting the development of such regional trading blocks in Africa?
Change and innovation are critical ingredients to human progress. In the case of Africa and as correctly noted in the Merrill Lynch Report, in an effort to develop beyond the vicious cycle of being commodity-led economies, we have to move towards a more diversified economic base. Do we as managers and leaders embrace change and innovation? Do we pay any meaningful attention to research and development? Do we fully appreciate the role of science and technology in development?
The other premise is that businesses are known to thrive best in politically and socially stable and reasonably predictable environments. Governance in its various facets, namely economic, political, civic and corporate, is pivotal to human development.
Do we fully appreciate the correlation between good governance policies and practices and business performance and social outcomes? Do we believe in the pluralism, rule of law and democratic ideals? Do we encourage institutions that we manage and lead to be "learning institutions?"
Do we perceive succession planning as an abstract management theory that should only apply to third parties or do we regard it as a strategic issue requiring that as leaders we should be the first ones to place ourselves on the transition lines?
Are we building institutions to last and outlive us, or are we placing the Institutions in a trajectory that merely coincides with our own individual tenures?
The last premise is that leadership is driven and should be informed by certain core values which should, among other things, define the very reason for our existence as businesses. And the question is; What core values drive our businesses? What is the raison d'etre for the existence of the businesses which we manage and lead?
In terms of Stakeholders' approval, do we hold what Mervyn King aptly refers to as "the license to operate" and do we renew our licenses annually?
Do we have Corporate Social Responsibility (CSR) Programs in our Institutions and are such Programs aligned to our core values and business strategies as Prof. Michael Porter of Harvard Kennedy School advocates, or do we see these Programs as being purely one off philanthropic events with limited and ephemeral palliative value? Do these Programs address sustainability issues?
Do we see any correlations between CSR Programs and the role the Programs play in creating the trickle down effect (TDE) and do we see TDE as away of economically empowering the citizenry which in turn results in the expansion of our markets?
Do we place any premium on values-based leadership? Do we give a hoot about ethical business practices as Jon M. Hunstman's experiences in Winners Never Cheat: Everyday Values We Learned as Children But May Have Forgotten teaches us, or do we have as the primary goal the pursuit of profitability with a philosophical underpinning that the end justifies the means?
In this connection, do we sincerely concur with the leadership messages coming through Bob Garratt's book: "The Fish Rots From the Head- The Crisis In Our Board Rooms: Developing the Crucial Skills of the Committed Directors?"
The other premise is that Sustainable Development through rational and responsible use of the environment and natural resources is a critical factor in ensuring long term business success and sustained profitability for businesses.
In her Acceptance Speech at the Oslo's Nobel Prize Award (2004), the Nobel Laureate, our own Prof. Wangari Maathai succinctly underscored how the sustainability agenda complements.
As I argued at the Commonwealth Law Conference, Public and Private Sectors as prime movers in the process of economic development and growth must assume the role of Surrogate Regulators in relation to environmental stewardship.
Indeed within the African context, Sustainable Development becomes a critical policy matter of even a greater topical significance when one considers the unprecedented demands for natural resources that are associated with the second scramble for Africa; a scramble in which the supercharged levels of economic development and growth in China and India ("Chindia") is forcing the two Asian economic giants to look externally to Africa for natural resources to support their respective development Agenda.
I also raised some concerns about China's extractive trading policies towards Sub-Saharan Africa and particularly the apparent opportunistic ambivalence in its overall trade policies as evidenced by marked absence of concerns about issues related to governance and Sustainable Development in the Continent.
In this regard, it is imperative that Africa must devise an international trading policy framework to strategically manage the non- sustainable natural resources extractive foray.
Lastly, do we as Leaders, fully understand the importance of the Environment and Sustainable Development? Do we have a clear understanding of the correlation between Sustainable Development and sustainable profitability? And finally, do we fully appreciate the critical role that ICT plays in sharing of information, education and development?
The honest and sincere answers which we can individually provide in response to the stubborn and irritating questions as noted above will give us fairly clear indications as to where we can position ourselves as Leaders who are capable of collectively moving Africa forward in its economic development and growth Agenda.
In conclusion, let me reiterate the age old truth that throughout history, Leaders are remembered for their enduring contributions to societal development. So as Leaders who should be transiting from "success" to "significance" and are keen on creating a lasting impact on society, how often do we reflect on the kind of legacies we would want to be remembered for? What inscription would we be comfortable with in the epitaph of our tombstones?
Are we aspiring to be truly authentic Leaders? What is our understanding of transiting from success to significance? As Dr. Rick Warren, Author of: "Purpose Driven Life, notes: "significance is about selflessly giving ourselves away in the service of others" and as Sir Winston Churchill once noted: "We make a living by what we get, we make a life by what we give."
Mr Okomo-Okello is the chairman of Barclays Bank of Kenya Limited and TPS Eastern Africa Limited-Serena Group
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